Holiday Shopping Gone Digital

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Holiday Shopping Gone Digital

With the holiday season in our midst, many consumers took advantage of sales and special offers on Black Friday and Cyber Monday. Although consumers are eager to find bargains, holiday spending expectations remain somewhat mixed.

According to Chelsey Dulaney of Dow Jones, “unsold goods have been piling up on retailers’ shelves, a worrisome trend that signals weak consumer spending.”[1] In another Dow Jones piece, Lisa Beilfuss said, “heading into the important holiday shopping season, retailers and government data have presented a less-than-rosy picture of American’s thirst for clothes, gifts and household goods.”[2] On the other hand, Fox Business has reported that 40% of U.S. consumers plan to spend more on holiday gifts this year than they did last year. That is in contrast to last year where only 25% expected to increase their holiday spending.[3]

Although uncertainty around holiday spending looms, the consensus is clear on a few topics, including the significance of holiday spending on consumer businesses’ performance and the large transition towards online shopping. According to the National Retail Federation (NRF), 46% of holiday shopping will be done online this year.[4]

Do these trends create any controversy? According to a Reuters poll, 51% of the 3,426 participants surveyed plan to do their online shopping at Amazon ($AMZN).[5] This movement toward online shopping, and thus a few massive retailers, can be a major disruptor to the performance of small businesses. Another issue that arises is that of cybersecurity. Will we see an increase in fraudulent purchases and hacks as the number of online transactions skyrockets this year?

Using AlphaSense, we can assess the expectations and implications that individual companies mention surrounding holiday shopping this year.

Holiday Spending Significance

Checkpoint Systems ($CKP) – Transcript, November 18, 2015“We literally make all of our earnings, all of our operating income in the last four months of the year. It lines up with retailers in general. And Black Friday is the day they actually go into the black.”

Scotts Miracle-Gro ($SMG) – Transcript, November 18, 2015“And these Black Friday events are becoming a big hunk of the business, and they kind of make or break the season in a lot of ways.”

Ford Motors ($F) – Transcript, November 18, 2015“And we anticipate that this holiday season we’re going to see considerable ad spending. But we will certainly participate.”

Sturm Ruger & Co ($RGR) – Transcript, November 18, 2015“Over the last five years or certainly since Mr. Obama won the election in 2008, Black Friday has been pretty big in firearms.”

E-Commerce

IBM ($IBM) – Press Release, November 18, 2015 “As consumers use the IBM Watson Trend app to pinpoint what products are popular and why, IBM also reports on how consumers will shop for these gifts … IBM predicts that, for the first time, more consumers will turn to their mobile devices than their desktop to seek out the best buys … Mobile sales are predicted to increase by more than 36%, up 34% over last year.”

Discover Financial Services ($DFS) – Press Release, December 2, 2015“73% of millennials surveyed say they will use a smartphone or tablet for holiday shopping, compared to 32% of non-millennials. Similarly, 52% of millennials say they’ll do most of their holiday shopping online, compared to 42% of non-millennials.”

Criteo SA ($CRTO) – Press Release, November 11, 2015“Black Friday is increasingly turning into an online sales event as consumers are more frequently using mobile devices to make purchases.”“Because four in 10 e-commerce sales in the U.S. include a cross-device journey, every device and platform counts for retailers as they strategically invest significant resource to engage and convert consumers through promotion and advertising.”

Cybersecurity

ACI Worldwide ($ACIW) – Press Release, November 18, 2015“As retailers and consumers prepare for the holiday shopping season, they should brace for a higher level of fraud online and across all channels.”“Significant increase in card-not-present (CNP) fraud attempts over 2014”

“Fraud rates by volume have increased: in 2015, 1 out of 86 transactions is a fraudulent attempt vs. 1 out of 114 in 2014.”

TJX Companies ($TJX) – Press Release, November 17, 2015“Recognizing the importance of spending time with loved ones, all T.J.Maxx, Marshalls and HomeGoods stores will remain closed on Thanskgiving so that associates can spend the holiday with their families.”

Amazon.com ($AMZN) – Press Release, November 18, 2015“This year, it will be even easier to spend time with loved ones thanks to “Watch A Deal” which allows holiday shoppers to pick the deals they’re most excited about and receive a notification to their mobile device when the deal is live.”